IRS Sets Per Diem Rates for 2013-2014 Travel Expenses

By Jason Bramwell
The IRS has set the special per diem rates for substantiating certain business expenses taxpayers incur when traveling away from home in 2013 and 2014. The per diem rates went into effect October 1, 2013.
IRS Notice 2013-65 includes special transportation industry meal and incidental expenses rates, the rate for the incidental expenses-only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method.
In October 2011, the IRS provided the general rules for using a per diem rate (Rev. Proc. 2011-47) to substantiate the amount of ordinary and necessary business expenses for lodging, meals, and incidental costs paid or incurred while traveling away from home. Taxpayers using the rates and list of high-cost localities provided in Notice 2013-65 must comply with the rules in Rev. Proc. 2011-47.
A year later, the US General Services Administration published final regulations revising the definition of incidental expenses under the federal travel regulations to include only fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. 
"Transportation between places of lodging or business and places where meals are taken and the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings are no longer included in incidental expenses," the IRS wrote in Notice 2013-65. "Accordingly, taxpayers using per diem rates may separately deduct or be reimbursed for transportation and mailing expenses."
The per diem rate for the incidental expenses-only deduction is $5 per day for any locality of travel inside or outside the continental United States.
The special meals and incidental expenses rates for taxpayers in the transportation industry are $59 for any locality of travel in the continental United States and $65 for any locality of travel outside the continental United States.
For purposes of the high-low substantiation method, the per diem rates are $251 for travel to any high-cost locality and $170 for travel to any other locality within the continental United States. Notice 2013-65 also lists the high-cost localities that have a federal per diem rate of $210 or more.
The rates are effective for per diem allowances paid to any employee for lodging, meals, and incidental expenses on or after October 1, 2013, for travel away from home on or after that date.
Related article:

You may like these other stories...

Truckers and other owners of heavy highway vehicles take note: Your next federal highway use tax return is due on September 2.The September 2 due date, which was pushed back two days because the normal August 31 deadline...
The head of the IRS has a message for taxpayers and tax preparers who have endured long wait times while on the phone with the tax agency: Call your member of Congress.During his keynote speech at the 69th Annual Meeting of...
Regulators struggle with conflicts in credit ratings and auditsThe Public Company Accounting Oversight Board (PCAOB), which was created by the Sarbanes-Oxley Act in 2002, released its third annual report on audits of...

Already a member? log in here.

Upcoming CPE Webinars

Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.